The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Commonwealth Brewery has matched the interim $0.25 per share dividend it paid out to its 3,000 shareholders in 2011, its managing director telling Tribune Business that it expected 2012’s final quarter to also go “according to plan”.

Speaking after the BISX-listed brewer and retailer/wholesaler unveiled a 7 per cent year-over-year net income rise for the three months to end-September 2012, Nico Pinotsis said the company’s financial performance for the first nine months was in line with internal forecasts.

“We’re pretty much driving by plan,” he said. “The first quarter was extremely good. We expected things to moderate, and that was to do with timing, seasonality. The way it’s moving, the numbers are more or less in line with plan.

“Our beer sales are doing good, our spirits sales are doing good, our wine sales are doing good. We have growth in all; I wouldn’t say all our brands, but all our segments. Our beer market is certainly developing very nicely, our beer volumes, and Kalik is doing very nicely.

“For nine months we’ve been running according to expectation, and I would not be surprised if the last three months run according to expectation. We have to see what the last couple of months give us. Certainly, in the spirits and wines field, it’s always an interesting part of the season.”

While Commonwealth Brewery had held off increasing beer prices, particularly for its local brands such as Kalik, Mr Pinotsis said spirits and wines prices had “gone up on average a couple of percentage points. Some went up significantly, and others were stable”.

As the cause, he pointed to the supply and inventory bottlenecks caused by the increasing demand for wines and spirits in the Asian market. Expensive whiskies and cognacs “we can hardly get here”, he added.

Commonwealth Brewery’s net income for the first nine months in 2012 hit $14.4 million, up $2.7 million on 2011, and it will pay out this month the exact same $7.5 million dividend that its investors enjoyed in November 2011.

While an agreement was “not concrete”, Mr Pinotsis was “confident” the company’s Burns House retail subsidiary would reach an agreement with the Nassau Airport Development Company (NAD) for a new store at Lynden Pindling International Airport (LPIA), once the international terminal was overhauled.

Commonwealth Brewery’s ‘Kalik Under the Crown’ promotion had been “a bit bigger and faster than we did last year”, while Heineken had also enjoyed increased marketing/promotional activity around the new James Bond premiere, Skyfall.

While Commonwealth Brewery’s sales had endured a weekend’s disruption due to Hurricane Sandy, Mr Pinotsis said the almost $4 million drop in accounts payables and accrued expenses to $9.956 million at September 30, 2012, compared to $13.847 million at year-end 2011, was a “seasonal fluctuation”. If sales and revenues went up, so did inventories payables.

Mr Pinotsis, meanwhile, challenged the company’s Bahamian rival, Bahamian Brewery and Beverage Company and its principal, Jimmy Sands, to “substantiate” its claims that Commonwealth Brewery was engaging in unfair competition by seeking to tie independent liquor retailers into exclusive distributorships and squeeze Sands out of the market.

“I’m not aware of that, and he’d better substantiate it,” Mr Pinotsis said.

As for Sands’ claim that Commonwealth Brewery was trying to remove its products and branding/marketing materials from regattas the BISX-listed company sponsored, Mr Pinotsis said it was normal global practice for sponsors to seek brand exclusivity in return for their contribution. As an example, he pointed to the London Olympics, where Coca-Cola was the sponsor and Pepsi-Cola noticeable by its absence.